Hostess Cupcakes, Twinkies finds their savior

NEW YORK (Reuters) - Dean Metropoulos may not be a household name, but the food industry veteran’s reach extends from the pantry to the refrigerator to the freezer.

A box of Hostess Brands "Twinkies" is on display, from what is believed to be the last shipment of Twinkies that Hostess brands will produce to stores in the country, at a Jewel-Osco grocery store in Chicago December 11, 2012. REUTERS/Jim Young

Metropoulos, who works with his sons Daren and Evan, has teamed up with longtime partner Apollo Global Management (APO.N) to buy some snack cake brands from bankrupt Hostess Brands Inc HTBRS.UL. Hostess said on Monday that their $410 million bid was unrivaled, paving the way for the sale of Twinkies, Ding Dongs and Cupcakes once a U.S. bankruptcy court approves.

It is too early to say what his new strategy will look like but Metropoulos, who came to the United States from Greece as a child, has quite a track record.

“I think of him as having the Midas touch,” said someone who has worked with Metropoulos over the years, but not on this deal.

“He’s got far more wins than he does losses. He comes into situations and is quickly able to evaluate what the issues are and puts all his efforts toward fixing them ... I think he’s going to do pretty well here with Hostess,” said the person, who declined to be identified.

Metropoulos is likely to maintain some union representation among Hostess workers, but is unlikely to get “tied up in the same situation that took the company down during the last go-round,” the source said.

Hostess won permission in November to wind down its business and liquidate its assets after a strike by a baker’s union crippled the company’s operations.

“This is the salvation Hostess has been waiting for,” said Anthony Sabino, a business law professor at St. John’s University. The amount being paid, he said, “is a significant outpouring for a brand that was basically left for dead.”

STRATEGIC INVESTOR

Last year, Forbes ranked the 66-year-old Metropoulos, a resident of Greenwich, Connecticut with Greek ancestry, as No. 377 on its list of U.S. billionaires. Over the last few decades, Metropoulos has sold everything from milk to pickles to frozen foods. His latest coup, in 2010, was his sons’ purchase of Pabst Brewing Co, maker of blue-collar-turned-hipster-favorite Pabst Blue Ribbon beer.

He did not respond to an interview request, though in an email, Daren Metropoulos said the family was working to have Twinkies back on store shelves by summer.

Dean Metropoulos has served as an executive at companies such as the Morningstar Group, which became Dean Foods (DF.N), Duncan Hines cake mix maker Aurora Foods, Ghirardelli Chocolates, and Mumm and Perrier Jouet Champagnes.

He also ran Chef Boyardee and Pam cooking spray maker International Home Foods, which was sold to ConAgra Foods Inc (CAG.N), and Pinnacle Foods, maker of Vlasic pickles and Log Cabin syrups. Blackstone Group (BX.N) bought Pinnacle in 2007 and filed for the group’s IPO in December.

Another food industry source said Metropoulos was often among the first people to smell new foods up for sale.

“Whenever there’s a food asset sale in North America, he always knew it was coming,” said the source, who declined to be named because they did not want to discuss business relationships publicly. “He had an interest in everything.”

It remains to be seen whether Metropoulos’s Midas touch will translate to the golden sponge cake of Twinkies, but one branding expert said that as long as the owners do not stray too far from its core strength, anything is possible.

“The biggest mistake for a brand that’s trying to reposition itself is to go too far away from what it’s about at its core,” said Martin Okner, managing director of advisory firm SHM & Co Corporate Navigators.

“There will never be a healthy Twinkie. There will never be a premium PBR in a can,” Okner said.